The Flaw of Averages
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| Audience/Grade: | College Freshman-Continuing Education |
| Discipline(s): |
Engineering Management Industrial Engineering |
| Special Topic(s): | |
| Learning Resource Type: |
Teaching - Software Tool/Environment |
| Author(s): |
Sam Savage |
| Description: | This site contains animations and downloads for Sam Savage's Oct. 8, 2000 article in The San Jose Mercury News. The site contains compelling examples to illustrate the "flaw of averages". Fab.xls is an Excel worksheet set up to demonstrate the Flaw of Averages with the aid of Monte Carlo simulation. It contains two tutorials for Simulating Profit and Investing for Maximum Profit using Monte Carlo simulation. First, download Sim.exe, which contains a trial version of the Monte Carlo simulation for Excel from Dr. Savage's book and software: INSIGHT.xla, then run the file to extract files. Readme.txt explains installation. Mac Users download Sim.hqx. Second, download Fab.xls and save it to your hard disk. Follow the tutorial steps on the two tabs preceeding the Model. |
| Rating: |
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| Related Resources | |
| Keywords: | probability statistics technology literacy financial engineering stochastic processes |
| Usage Tip | |
| Related ABET Criteria: |
(b) Design and conduct experiments, analyze and interpret data |
| Use of Resource: |
The site has some intuitive case studies as well as links to Savage's Investment Risk and Simulation seminars. |
| Difficulty: |
Medium |
| Interactivity Level: |
Very low |
| Version Info | |
| Publication Date: | September 2000 |
| Platform/Format: |
WWW |
| Cost: |
Free |
| Download URL: | http://www.stanford.edu/~savage/flaw/ |
| Metadata: |
IEEE LOM Record |
| Collection: |
NEEDS
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